Tuesday, February 19, 2013

Electric cars can go 3 to 4 miles per kW-Hr. The average cost of electricity in the US is about $0.11 per kW-Hr, so if you drive 1000 miles per month, you'd be using about 350 kW-hr of power costing about $38 per month. That is about $462 per year. An electric motor is over 90% efficient.

A gasoline powered car would require 33 gallons per month at 30 miles per gallon. At today's gasoline price of $3.50, that works out to $116 per month or $1400 per year. An internal combustion engine is only 30% efficient at best.

So, just considering fuel costs, you'd save about $1000 per year with the electric car or double that amount if you drive 2000 miles per month or 24,000 miles per year. The depreciation of the electric car should be less than a complicated gasoline car since there are fewer moving parts. The battery life should be good for at least 100,000 miles, maybe 200,000 miles and it's replacement cost should come down over time. Maintenance on an electric car should be less too with few moving parts. Regenerative braking should reduce brake wear for instance. So, there could be additional savings in addition to fuel savings.

The Purchase Price is High

The problem is that the purchase price of an electric car is high or very high. Electric cars are not selling well. Because of that, Nissan instituted a massive price cut to it's Leaf electric car. It's down to $22,000 or so for the basic model and more like $28,000 to $30,000 with desirable preferences. Toyota Prius plug-in cars run about $30,000. So, you're paying $10,000 to $12,000 more for the electric car. These are very small cars and not the luxury models. Many electric-only cars are in the $100,000 price range.

Is a 5 to 10 year payout good enough for you?

Ill-conceived Tax Subsidies For Luxury Cars

There's a $7500 government tax rebate for electric to encourage purchases, so that helps the individual (not the gov't budget deficit). This even though there are little savings in carbon dioxide emitted at the power plant that generates the power. Now, if we widely used Molten-Salt Thorium Reactors, then electricity costs and emissions would definitely come down!

Most of the electric cars are luxury models costing $100,000 for the Tesla and Fisker Karma. So why are US taxpayers subsidizing luxury car purchases---especially when there's little or no reduction of carbon dioxide gases??

Monday, February 18, 2013

Wise words from Victor Hanson, former professor of classics at Cal State and now a fellow at the Hoover Institute, comments astutely on how history can inform us on our current condition in his article The Decline of America

By any historical marker, the future of Americans has never been brighter. The United States has it all: undreamed-of new finds of natural gas and oil, the world’s preeminent food production, continual technological wizardry, strong demographic growth, a superb military, and constitutional stability.

Yet we don’t talk confidently about capitalizing and expanding on our natural and inherited wealth. Instead, Americans bicker over entitlement spoils as the nation continues to pile up trillion-dollar-plus deficits. Enforced equality, rather than liberty, is the new national creed. The medicine of cutting back on government goodies seems far worse than the disease of borrowing trillions from the unborn to pay for them.

In August 1945, Hiroshima was in shambles, while Detroit was among the most innovative and wealthiest cities in the world. Contemporary Hiroshima now resembles a prosperous Detroit of 1945; parts of Detroit look like they were bombed decades ago.

History has shown that a government’s redistribution of shrinking wealth, in preference to a private sector’s creation of new sources of it, can prove more destructive than even the most deadly enemy.

"The similarities between the horrific voyage of the Carnival Triumph and the tragic voyage of the dysfunctional ship of state we call America are many. We have a ruling class consisting of the President, Congress, Judiciary, Central bankers, Media titans, and goliath corporation CEOs who care not for the citizens of this country. You are ignorant peasants in their eyes. They only care about maintaining and expanding their wealth, control and power through the complete capture of our financial markets, political system and media propaganda to the masses. The health and welfare of the peasants isn’t even on their radar screen. The ruling class steering this ship of fools have no interest in the truth or the best long –term interests of the country. The vast majority of the passengers on this impaired listing ship prefers to believe the propaganda and lies spewed by the captain and his minions. They prefer the illusion of safety and security to the truth about the real condition of this ship. When the engines of this ship come to a grinding halt, their illusions will be shattered. Big government will come up small when it counts. The government propaganda and public relations will be revealed as nothing but hot putrid air and fecal matter.

Speaking of fecal matter, President Obama’s State of the Union address, which was watched by 33 million (down from 52 million in 2009) believers, was a perfect reflection of the thinking that led to the Carnival Triumph disaster. The reality facing the country is: $220 trillion of unfunded entitlement liabilities; a $16.5 trillion national debt; annual deficits exceeding $1 trillion; 48 million citizens on food stamps; 11 million people on SSDI; a true unemployment rate of 23%; true inflation exceeding 5%; record high gasoline prices; 0% interest rates for senior citizen savers; free money for criminal bankers provided by their sugar daddy Bernanke; not one criminal prosecution of a Wall Street executive for the greatest financial fraud in history; a war department that spends $1 trillion per year and fights undeclared wars around the world; a chief executive that invokes dictatorial executive orders to murder Americans with his fleet of predator drones and imprison citizens indefinitely without charges; and a bureaucratic nightmare called Obamacare that will drive up deficits, drive up healthcare costs for every family, enrich the healthcare industrial complex, drive doctors into retirement, and drive small businesses into bankruptcy.

Rather than deal with this reality, Obama chose the Carnival Cruise Line method of public relations, misinformation, denial and delusion. He has embraced the Big Lie concept as if he had created it. With a straight face he proposes “investments” in infrastructure, new jobs programs, new education initiatives, more green energy projects, pollution control schemes, bailing out more underwater mortgages, and raising the minimum wage, all done for the children – and it won’t add one cent to the deficit. Instead of leveling with the American people and explaining the dire economic issues confronting our nation that require sacrifice, reality based thinking, and tough choices, we got more platitudes, class warfare, divide and conquer, phantom spending cuts, disingenuous twisting of the truth, intellectual dishonesty and fuzzy math. Public relations spin created by Madison Avenue maggots and pronounced grandly by corrupt puppet politician hacks will not prevent the catastrophic engine failure that will leave this country adrift in a sea of its own feces.

Our cruise of illusions and delusions is headed for troubled water. The math challenged citizens on this ship have been enjoying the 24 hour pizza buffet without the labor required to pay for the bounty. When your leaders boldly lie and tell you we don’t have a spending problem, refer to proposed spending increases as “investments”, and hail $1.6 trillion of spending cuts that did not happen, you’ve got a ship that will be signaling SOS in the imminent future. Both political parties are laughable in their blathering about spending cuts as Bush and his Republican cronies drove spending from $1.9 trillion in 2001 to $3.0 trillion in 2008 with their unfunded wars, unfunded new entitlements (Medicare Part D), Wall Street bailouts, and creation of police state agencies (DHS); while Obama and his Democrat co-conspirators have driven spending up to $3.8 trillion in four years with new unfunded entitlements (Obamacare), expansion of warfare in the Middle East (they sit on top of “our” oil), $800 billion stimulus handouts, $60 billion hurricane relief pork handed out for $25 billion of uninsured losses, and bailing out banks, auto companies, homeowners, and other gamblers who took undo risks and lost to the tune of hundreds of billions. Politicians and the inhabitants of this country have forgotten there are consequences to their actions and inactions.

Carnival Cruise Line is trying to buy off the passengers with refunds and $500 bribes to keep them quiet and sedated, while protecting their continued hundreds of millions in profits and million dollar bonuses for their executives. The ruling class in the United States has bought off the American people with entitlement promises that can’t possibly be honored, food stamps, SSDI, tax rebates, homebuyer tax credits, loan modification programs, Cash for Clunkers, payroll tax cuts, $1 trillion of taxpayer financed student loans, taxpayer financed subprime auto loans, and a myriad of other handouts designed to keep the masses sedated, while the ruling class continues to pillage the national wealth. It’s as if the entire country has been charging their food, drinks, excursions, and purchases to their room number and the bill has reached $16.5 trillion, rising by $3 billion per day. This voyage is reaching an end and the bill is coming due. The engine is on fire but the captain is telling us all is well. Eventually, everyone will know the captain lied."

Friday, February 15, 2013

Let's see, Europe's GDP shrank by 0.6% in the last quarter of 2012 after shrinking the previous quarter by 0.1%. A major investment bank revised it's growth target for Europe in 2013 to 0.0%. Yes, that's right, a goose egg---and the forecast has continued to weaken over time. Japan's economic contraction continues for 3 quarters in a row with a shallow 0.1% GDP decline in the last quarter of 2012. The US also had a "surprise" contraction in the last quarter of 2012. So, all of the major economies are in negative economic growth territory, with the notable exception of China. There is usually a strong correlation between individual country's GDP and the rest of the world and that includes China.

Of course, with China, government spending on bridges, ghost cities and high speed railroads to nowhere count as "GDP." Up to 40 to 50% of Chinese "GDP" is debt-financed government spending on "infrastructure" boondoggles projects. How much organic growth in China is not really known since the Chinese are among the world's biggest liars and cheats.

So, after trillions of dollars of stimulus, trillions of government deficits, trillions of money creation (printing) in the US and Japan and the rest of the world, the world's growth is sinking. Amazing isn't it? Economists say that Europe's woes are from "austerity" but that austerity comes from just a few minor peripheral countries. There's not really much austerity in Europe!

Here's an interesting chart from the Economist showing the trend of the world economy since the post-crisis peak growth in 2009:

So, the chart above shows data from 2007 and shows the trend in Global GDP growth has been down since the "recovery" in 2009. Data from Q4 in 2012 confirms the trend downward. Euro-growth is already non-existent since 2011. There has been contraction in the past 12 of 15 months in the UK for example.

Geopolitical events also show economic distress. Governments try to distract the populace when times are difficult. Think about it. Argentina is making noise about the Falklands when the country is on the verge of default (again), their "Chavista" president De Kirchner has frozen food prices and has been lying about the true state of the economy and rise of inflation. As I mentioned, China lies like hell about it's 'GDP' and all is not well there. How can I tell? Because China is making war-like noises with all neighboring countries in the South China Sea and with Japan regarding disputed islands. Japan's new prime minister has essentially taken over their Central Bank and has "mandated" vastly expanded money 'printing' to weaken the Yen and create inflation. He's also calling for more military spending. There's nothing like a war and re-arming to help the economy!

The US is Becoming Japan (or Argentina?)

Japan is the future for America. Government debt in Japan is some 230 percent of GDP after something like 20 'stimulus' packages and deficit spending over 20 years. It hasn't worked. Still ten year Government debt yields about 1% with short term debt yielding much less. You see, Japanese investors have become used to -1% inflation (deflation) for some 20 years now, so +1% yield gives investors 2% real returns. But if the Japanese government takeover of the central bank works and inflation rises to the stated goal of 2%, eventually government bond yields will rise to 2% or more. Eventually interest payments on the debt will consume their entire national budget due to the huge 'stockpile' of debt outstanding. Already government deficits are some 10% of GDP and rising. Government revenues are shrinking because the population is shrinking and will do so for as far as the eye can see. There is no way out. Japan is well past the point of no return.

Thursday, February 14, 2013

Sarah Palin, who is ridiculed by The Left for being 'stupid; or 'idiotic', succinctly and correctly nails the current state of the union as reported by Breitbart:

"What is the true state of our union? We are a country going bankrupt to fund a bloated, distant, and often corrupt federal government led by venal politicians more concerned with paying off their campaign cronies and consolidating their own power than in preserving the constitutional republic that so many have fought and died for (including our brave men and women in uniform who were barely mentioned last night)."

"If you missed President Obama’s State of the Union address last night, you didn’t miss much – especially if you watched any of his past four State of the Union addresses," Palin wrote. "We heard the same recycled rhetoric, and we heard his Orwellian declaration that the cornucopia of new federal programs he proposed, as well as his intention to eradicate world poverty, that would not 'increase our deficit by a single dime.'"

Obama should be infamous by now for using the phrase "not increase our deficit by a single dime" since he's the King of Deficits. Remember he said that ObamaCare wouldn't add a dime to the deficit? It would be funny if not so tragic. It's ironic that Palin is pilloried by the Left when it is Obama and his supporters who have their heads in the sand and can never learn the lesson of history. Socialism and central planning were profoundly debunked last century and will be debunked in this new century too.

Democrats believe that the government is the economic answer to all our economic and social ills.

The debt hangs like a sword of Damocles, reminding Obama that he cannot pursue his liberal agenda without raising taxes or bankrupting the country.

We are sick and tired of hearing why a program is wanted but not how we are going to pay for it.

Even without Obamacare, Medicare and social security are threatened by the demographics of the baby boomers. Within a few years we will go from 42 million seniors to 77 million seniors in the space of a few years.

Obama by his nature is a progressive, a believer that government is the answer, that the elite few can make society better if only they had enough money.

Obama believes that stimulus would work if only government had more taxpayer money to spend. No matter that stimulus spent $400,000 per job created.

Let us hope the debt crisis will be managed before we destroy this great country, before we destroy our currency, before we destroy the dream we hope to pass on to our kids and our grandkids.

Paul concludes with a message "We believe that government is the problem and not the solution".

Tuesday, February 12, 2013

“Talk about something else that’s falling from the sky and that is an asteroid. What’s coming our way? Is this an effect of, perhaps, of global warming, or is this just some meteoric occasion?” CNN’s Deborah Feyerick asked Bill “The Science Guy” Nye, head of the Planetary Society, in a Saturday segment.

This little girl is so dizzy! If you ever needed to know how idiotic TV "journalists" are, you've got it here in a nutshell. People in media and the arts are so poorly educated, they can't even see that asteroids have nothing to do with the earth's atmosphere. And shame on anyone who bothers to listen to these 'talking heads' about any serious issue of the day. Heaven forbid you'd ask these people to understand economics or a 'pro-growth' economic agenda!

People, these journalists are just teleprompter readers and ill-prepared for anything else. Liberal Arts journalism degrees are just woefully inadequate for the job. You saw this complete incompetence during the election season last year and it was a shameful display of ignorance. God help us all.

Monday, February 11, 2013

Finally we find out from Defense Secretary Leon Panetta, at testimony in front of the Senate Armed Services Committee, that neither Obama or Hillary Clinton were in touch with Panetta and his team after learning of the Benghazi attack. Panetta said that they left it "up to us." Mind you, the attack started at about 3 pm in the afternoon---during normal business hours. So, we find out that BOTH Obama and Clinton received their 3 am call (actually 3 pm) and neither were up to the task. Meanwhile 4 people died including Ambassador Chris Stevens.

The President didn't care enough to call any of the players at the situation room after he had heard of the attacks! And we call this guy our "commander in chief?" I suspect that we're still getting a bunch of lies from Panetta. The truth is probably even worse than we now know. Probably Obama's role was even worse than dereliction of duty. He probably ordered the forces to stand down and let our own people die---the only thing that could be even more disturbing. The truth is probably even worse than we know.

The level of incompetence from this administration just amazing. The truth is that Obama doesn't give a shit about other people or even his own Ambassador who was under attack. The only thing he gives a damn about is himself and his self-aggrandizement. Whatever he was doing at the time was WRONG since he should have been in charge of events or at least showing some interest!!

So, Obama's so-called 3 directives that he said that he gave to "secure our people and do what is necessary to protect them, find out who did it to bring them to justice, and investigate precisely what happened." are seriously in doubt. Why? Because Obama was "missing in action" or AWOL from beginning to end. HE did nothing to secure anyone! Then he began weeks of lying about the cause of the attacks. We had to wait 5 months now to find out what really happened, so any claim to "investigate" what happened is complete bullshit.

The behavior of Obama and his administration during and after this tragedy is despicable. Words like "slacker," "incompetent," and "derelict" are other good adjectives that come to mind. It's too bad that you can't impeach a President for "dereliction of duty."

Tuesday, February 5, 2013

As I mentioned in my blog entry Obama Received His 3 am Wakeup Call...and Failed, the President, the Secretary to the UN, the Secretary of State all lied about the cause of the uprising in Benghazi that killed our great ambassador and 3 others in October. For weeks the story evolved, almost immediately contradicting the President of Libya, who correctly labeled the events "terrorism" from day one.

The main thing is why all the lies? Why persist in the lies? Since the attack lasted for 7 hours with men huddled, under attack, in the "safe house", why wasn't there a rescue attempt? There was reporting by Fox News, our only opposition news outlet, that rescue forces were told to "stand down" by someone. Is that true? If so, who told the forces to stand down?

If President Obama blamed the attack in Libya on a film, knowing that it was not a demonstration but a planned terrorist attack and did so two months before an election, then that is an impeachable offense. That’s what difference it makes.

At first, the administration's 'spin' was that the uprising and attack was a spontaneous reaction to a silly internet video. Then Susan Rice changed her tune saying that she was only relaying the best intelligence available which was another lie. Joe Biden repeated the same "lie" or "talking point" in media interviews. But everything was known within a couple of hours of the beginning of the attack. Weeks later CBS released a video interview of the President admitting terrorism within a day of the attack. Why is our so-called free media protecting this President? Why? Because he's a black president!

To recap, everything was known about the attack right away. Emails widely disseminated in Washington within 1 1/2 hours after the start of the attack concluded that it was a terrorist group. There was live drone video feed of the event available in Washington real-time of the attack. This was all occurring on a Friday mid-afternoon Eastern time during business hours. Subsequent lies by the President included that the attack was in the middle of the night. FALSE! It was mid-afternoon Washington DC time!

It's important because while politics played out, 4 people died. It's important because the truth was known in real-time from drones in the area and nearly real-time email notifications. The truth was "repressed".

This President has been unable to utter the words "Islamic Terrorist" during his entire lifetime. If you can't correctly identify your enemy, then how likely is it that you'll be able to develop the correct policy? Why does our "Free" media protect Presidential propaganda? Why? Because he's black and predictably liberal! But remember, political correctness kills people!

The Left and the Liberal media have shielded this President from any criticism, from any accountability and from any blame. The President will not admit there was a screw-up. He will not admit EVER that he has screwed up on the economy, screwed up the health care mess, screwed up his first term.

From MoneyNews, Peter Morici, hardly an irresponsible economist who is a professor of economics at University of Maryland and former chief economist at the US International Trade Commission, succinctly summarizes the end game of continued zero interest rates, money printing and bond buying by the Federal Reserve:

The Fed has become “an enabler of presidential and congressional inaction [on entitlements, etc.] by keeping interest rates artificially low for five years and now by printing money to buy U.S. bonds and mortgage backed securities at a $1 trillion annual pace,” he writes on his blog.

“Record low interest rates are propping up weak consumer demand but sowing the seeds of another financial crisis.”

Urban real estate is rising to unsustainable levels, as are junk bonds, Morici says. The Fed’s low interest rates have helped push student debt over $1 trillion, with one in six loans in default. The easing also has allowed many states to avoid pension reform, he adds.

“Inevitably, all that money will push up inflation, and then the Fed will be compelled to stop buying bonds and let interest rates rise to levels the federal and state governments can't bear easily,” Morici writes.

“Financial markets will collapse, again!”

Well said! That said, it seems high inflation is pushed off into the future. One wouldn't normally expect inflation where there is such slack in the labor market and plenty of supply of cheap goods from abroad. But we're in uncharted territory.

But even after all of the $1 Trillion deficit spending, trillions of money printing and trillions of bailouts, the economy remains weak. Last quarter's first estimate of GDP was slightly negative. With the restoration of 'normal' payroll taxes and new taxes enacted in January, it appears likely that the 1st Quarter of 2013 GDP may be negative as well. If true, those new taxes would qualify as a policy mistake--something that all of the Republicans tried to argue. It would appear that ANY austerity (just reducing the rate of spending growth--not absolute cuts) will create negative growth, something that the UK has found by trying to trim the growth of spending. The UK has had negative growth for 12 out of the last 15 months.

Monday, February 4, 2013

National politics remain a mess but States are being managed more competently with much higher public satisfaction.

Fully 30 state governors, or 60%, have Republican governors and half of all states have both Republican governors and Republican legislatures. And according to Conn Carroll at The Washington Examiner:

According to the latest data from the Bureau of Labor Statistics, the average unemployment rate in the 25 states controlled completely by Republicans is just 7.2 percent, more than half a point lower than the national 7.9 percent unemployment rate. In the 14 states with full Democratic control, unemployment is 8.4 percent, a full half-point higher than the national average.

The Republican state economies are growing faster too. According to the latest data from the Bureau of Economic Analysis, the real gross domestic product of the 25 Republican-controlled states has grown almost .25 points faster since 2008 than the real GDP of the 14 Democratic-controlled ones.

I'm certainly enjoying living in Texas where Texas lawmakers and governor Rick Perry suit my libertarian tastes. It's one of the states with no income taxes, where the fundamental beliefs include small and efficient government, low regulation and economic freedom. Some 87 percent of Texas legislators come from the private sector--working people. Texas has been creating jobs for as long as I've been an adult. When I graduated from college some 33 years ago, it was the place to go to get a job. It still is.

Yeah and Leftists like Paul Krugman pooh-pooh Texans success claiming that it's all about oil and gas. Hey, California has huge oil and gas reserves, but they have continued to discourage oil and gas exploration. The last two oilfields developed in Federal waters offshore California had over 1 billion barrels of recoverable oil. There's more! It's all about governance and administration Mr Krugman. And regarding Texas' population gains, there's reasons that people come here. There's opportunity here! There's also reasons that people are leaving states like California. People vote with their feet.

California is la-la land with incredibly burdensome regulation. All those bureaucrats are busy-beavers creating burdens on business. According to Chuck Devore in National Review says:

According to a 2009 study commissioned by the California legislature, state regulations cost almost $500 billion per year, or five times the state’s general-fund budget. These regulations ding the average small business for some $134,122 a year in compliance and opportunity costs.

Meanwhile, some 2 million people have left California in the past 10 years. California state spending is out of control as it is at the national level, and taxes keep going up and up. It might not sound that dramatic, but according to Chuck Devore, Texans pay only 7.9% of their income to State and Local taxes while California's figure is 10.9%. Taxes matter! Business regulation matters!

I applaud Phil Mickelson threatening to leave California due to the 13% top income tax rate enacted by their legislature. I don't why he apologized subsequently for speaking his mind. Tiger Woods fled California about 10 years ago for tax reasons. He went to Florida which is a no income tax state. Mickelson complained that his over top marginal rate is about 60% now. California is like France and Mickelson is our Gerard Depardieu.

Sunday, February 3, 2013

Here's a couple of amazing graphs showing huge oil production increases in North Dakota and especially in Texas. It's the result of intense exploitation of oil bearing shales in these states. (click any chart to enlarge)

Follow by Email

About Me

I have 30 years of international oil and gas project experience but now early-retired. I hold a Bachelors of Chemical Engineering and an MBA in Economics. I have traveled the world widely for work and pleasure and call the US Gulf Coast my home.